U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC 20549

                          FORM 10-QSB
  QUARTERLY REPORT FOR SMALL BUSINESS ISSUERS SUBJECT TO THE 1934
                  ACT REPORTING REQUIREMENTS

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,2002.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the transition period from ________________ to ___________________


               Commission File Number: 000-29983


               GLOBAL INDUSTRIAL SERVICES, INC.
    (Exact name of registrant as specified in its charter)


           Nevada                                   98-0203485
(State or other jurisdiction of                  (I.R.S. Employer
incorporation or organization)                  Identification No.)



               14th Floor, 609 Granville Street
                Vancouver, B.C. Canada V6Y 1G5
           (Address of principal executive offices)

 Registrant's telephone number, including area code (604) 683-8358

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X

There are 29,626,960 shares of common stock issued and outstanding
as of August 14, 2002.



                             INDEX

                                                                      Page
PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements

     Consolidated Balance Sheets......................................  4

     Consolidated Statements of Operations (Unaudited)................  5

     Consolidated Statements of Stockholders' Equity and
     Comprehensive Income (Loss) (Unaudited)..........................  6

     Consolidated Statements of Cash Flows (Unaudited)................  7

     Notes to Financial Statements....................................  8

Item 2. Management's Discussion and Analysis and Plan of Operation.... 26

PART II - OTHER INFORMATION

Item 1. Legal Proceedings............................................. 29

Item 2. Changes in Securities......................................... 29

Item 3. Defaults Upon Senior Securities............................... 29

Item 4. Submission of Matters to a Vote of Security Holders........... 29

Item 5. Other Information............................................. 29

Item 6.Exhibits and Reports on Form 8-K............................... 30

Signatures............................................................ 32


                              -2-


                PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

            Consolidated Financial Statements of

            GLOBAL INDUSTRIAL SERVICES INC.
            (Expressed in U.S. Dollars)
            (unaudited)

            June 30, 2002 and December 31, 2001



                              -3-




GLOBAL INDUSTRIAL SERVICES INC.
Consolidated Balance Sheets
(Expressed in U.S. Dollars)

                                     December 31,     June 30,
                                             2001         2002
                                        (Audited)  (Unaudited)
----------------------------------------------------------------
Assets
Current assets:
  Cash and cash equivalents              $391,277     $ 38,170
  Accounts receivable (note 18(c))        466,982      808,675
  Due from director                         4,746       18,758
  Prepaid expenses                         22,552       49,398
  Inventories (note 2)                    299,000      330,485
  --------------------------------------------------------------
  Total current assets                  1,184,557    1,245,486

Property and equipment (note 3)         3,019,794    2,941,274
Investments (note 4)                      100,591            -
Goodwill (note 5)                          19,743       19,743
Equipment lease deposit                    45,500       45,500

----------------------------------------------------------------
Total assets                           $4,370,185   $4,252,003
================================================================

Liabilities and Stockholders' Equity

Current liabilities:
  Bank indebtedness (note 6)             $ 75,949    $ 123,195
  Accounts payable                        646,434      656,572
  Accrued liabilities                     129,005      146,493
  Deferred revenue                         75,507       41,714
  Payable on acquisition of
   subsidiaries (note 7)                1,174,300    1,174,300
  Current portion of long-term
   debt (note 8)                          553,528      648,274
  Current portion of obligations
   under capital leases (note 9)          201,869      216,572
  Advances from affiliated parties
   (note 10)                              346,539      575,682
  --------------------------------------------------------------
  Total current liabilities             3,203,131    3,582,802

Long-term debt (note 8)                   677,013      546,665
Obligations under capital leases
 (note 9)                                  60,597       32,466
----------------------------------------------------------------
                                        3,940,741    4,161,933


Stockholders' equity:
  Authorized:
     50,000,000 Common stock at
      $0.001 par value
  Issued and outstanding:
     28,390,597 Common stock
      (2001 - 24,971,931)                  19,973       24,427
  Additional paid-in capital            4,672,499    5,533,269
  Accumulated deficit                  (4,234,279)  (5,453,706)
  Accumulated other comprehensive
   loss:
     Cumulative translation adjustment    (28,749)     (13,920)
  --------------------------------------------------------------
  Total stockholders' equity              429,444       90,070

Continuing operations (note 1(a))
Commitments and contingencies (note 16)
----------------------------------------------------------------
Total liabilities and stockholders'
 equity                                $4,370,185   $4,252,003
================================================================

See accompanying notes to consolidated financial statements.

                                       -4-




GLOBAL INDUSTRIAL SERVICES INC.
Consolidated Statements of Operations
(Unaudited)
(Expressed in U.S. Dollars)


                  For the three  For the three     For the six   For the six
                   months ended   months ended    months ended  months ended
                  June 30, 2001  June 30, 2002   June 30, 2001 June 30, 2002
------------------------------------------------------------------------------

Sales:
  Drilling           $  873,681     $  582,096      $1,558,314    $  796,209
  Engineering fees      719,684        569,238       1,327,375       976,340
  ----------------------------------------------------------------------------
                      1,593,365      1,151,334       2,885,689     1,772,549
Cost of sales:
  Drilling              514,422        400,945       1,058,884       666,742
  Engineering           473,674        413,545         849,703       722,363
  ----------------------------------------------------------------------------
                        988,096        814,490       1,908,587     1,389,105
Gross margin:
  Drilling              359,259        181,151         499,430       129,467
  Engineering           246,010        155,693         477,672       253,977
  ----------------------------------------------------------------------------
                        605,269        336,844         977,102       383,444
Operating expenses:
  General and
   administrative     1,240,073      1,099,488       3,557,641     1,465,374
  Amortization of
   goodwill              46,386              -          97,246             -
  Depreciation of
   equipment                  -          2,222               -         4,330
  ----------------------------------------------------------------------------
                      1,286,459      1,101,710       3,654,887     1,469,704

------------------------------------------------------------------------------
Loss before other
 income (expenses)     (681,190)      (764,866)     (2,677,785)   (1,086,260)

Other income (expenses):
  Interest on
   long-term debt       (27,574)       (80,354)        (52,421)     (158,158)
  Interest on payable
   on investments
   (note 7)                   -        (12,932)              -       (26,190)
  Write off of
   investments (note 4)       -       (105,332)              -      (105,332)
  Interest income        12,274            331          27,271         2,656
  Forgiveness of debt         -              -               -       112,500
  Other income                -         27,257               -        41,357
  ----------------------------------------------------------------------------
                        (15,300)      (171,030)        (25,150)     (133,167)

------------------------------------------------------------------------------
Loss                  $(696,490)     $(935,896)    $(2,702,935)  $(1,219,427)
==============================================================================

Loss per share of
 common stock:
  Basic and diluted     $ (0.04)       $ (0.03)        $ (0.17)      $ (0.04)
==============================================================================

Weighted average
 number of shares of
 common stock:
  Basic and diluted  19,769,431     27,710,865      15,962,180    27,710,865
==============================================================================
See accompanying notes to consolidated financial statements.

                                       -5-




GLOBAL INDUSTRIES SERVICES INC.
Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)
(Unaudited)
(Expressed in U.S. Dollars)
Six months ended June 30, 2002

<Table>

                                     <c>         <c>      <c>          <c>             <c>           <c>           <c>
                                                                                              Foreign
                                               Common shares  Additional         Common      Currency                         Total
                                        --------------------     paid-in          stock   translation    Accumulated  stockholder's
                                            Shares    Amount     capital  subscriptions    adjustment        deficit         equity
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2001              24,971,931  $ 19,973  $4,672,499              -    $ (28,749)   $(4,234,279)      $ 429,444
------------------------------------------------------------------------------------------------------------------------------------

Issuance of shares of common stock
 for cash                                  966,666       966     129,034              -            -              -         130,000
Issuance of shares of common stock
   for services                          2,427,000     2,427     546,843              -            -              -         549,270
Issuance of shares of common stock
   in settlement of payables             1,061,363     1,061     184,893              -            -              -         185,954
Components of comprehensive loss:
 Loss                                            -         -           -              -            -     (1,219,427)     (1,219,427)
 Foreign currency translation adjustment         -         -           -              -       14,829              -          14,829
                                                                                                                         -----------
                                                                                                                         (1,204,598)

------------------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 2002                  29,426,960  $ 24,427  $5,533,269       $      -    $ (13,920)   $(5,453,706)      $  90,070
------------------------------------------------------------------------------------------------------------------------------------
</Table>

                                              -6-



GLOBAL INDUSTRIAL SERVICES INC.
Consolidated Statements of Cash Flows
(Unaudited)
(Expressed in U.S. Dollars)

<Table>

                                                    <c>             <c>
                                                          For the six    For the six
                                                         months ended   months ended
                                                        June 30, 2001  June 30, 2002
-------------------------------------------------------------------------------------

Cash flows from operating activities:
  Loss                                                   $(2,702,935)   $(1,219,427)
  Items not involving cash:
     Depreciation and amortization                           198,525        158,264
     Bad debt expense                                         73,589          3,911
     Stock-based compensation                              2,268,750        735,224
     Debenture discount amortization                           3,750              -
     Write off of property and equipment                       8,000              -
     Write off of investment                                       -        105,332
  Changes in operating assets and
   liabilities (note 18(a))                                  261,924       (424,114)
  -----------------------------------------------------------------------------------
  Net cash provided by operating activities                  111,603       (640,810)

Cash flows from investing activities:
  Additions to property and equipment, net                  (134,997)       (79,744)
  Additions to investments                                     1,272         (4,741)
  -----------------------------------------------------------------------------------
  Net cash used in investing activities                     (133,725)       (84,485)

Cash flows from financing activities:
  Increase in bank indebtedness                               82,179         47,246
  Proceeds from issuance of shares of
   common stock                                               75,000        130,000
  Repayment of note payable                                 (103,137)       (35,602)
  Proceeds from note payable                                 100,000              -
  Repayment of capital leases                                      -        (13,428)
  Advances from affiliated party                                   -        229,143
  Decrease in payable on acquisition of subsidiaries        (140,000)             -
  -----------------------------------------------------------------------------------
  Net cash provided by financing activities                   14,042        357,359

Effect of changes in foreign exchange rates
 on cash balances                                             (6,094)        14,829

-------------------------------------------------------------------------------------
Decrease in cash and cash equivalents                        (14,174)      (353,107)

Cash and cash equivalents, beginning of period               119,376        391,277

-------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                  $  105,202      $  38,170
=====================================================================================
</Table>


See accompanying notes to consolidated financial statements.

                                       -7-



GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



Global Industrial Services Inc. (the "Company") was incorporated under the laws
of the State of Nevada on July 24, 1998.  On March 30, 2000, the Company changed
its name from Charger Ventures, Inc. to Global Industrial Services Inc.  The
Company, through its subsidiary Stothert Group, Inc., provides engineering,
construction and project management services and provides, through its
subsidiary AK Drilling, Inc., mineral and water drilling services.

1. Accounting policies:

  (a) Basis of presentation:

      The information included in the accompanying interim financial statements
      is unaudited and should be read in conjunction with the annual audited
      financial statements and notes thereto contained in the Company's Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 2001.  In
      the opinion of management, all adjustments, consisting of normal
      recurring adjustments, necessary for fair presentation of the results of
      operations for the interim periods presented have been reflected herein.
      The results of operations for the interim periods presented are not
      necessarily indicative of the results to be expected for the entire
      fiscal year.

      These financial statements have been prepared on a going concern basis in
      accordance with United States generally accepted accounting principles.
      The going concern basis of presentation assumes the Company will continue
      in operation throughout the next fiscal year and into the foreseeable
      future and will be able to realize its assets and discharge its
      liabilities and commitments in the normal course of business.  Certain
      conditions, discussed below, currently exist which raise substantial
      doubt upon the validity of this assumption.  The financial statements do
      not include any adjustments that might result from the outcome of this
      uncertainty.

      As reflected in the accompanying consolidated financial statements, the
      Company has had recurring losses from operations, negative cash flow from
      operations and at June 30, 2002, had a working capital deficiency of
      $2,337,316.  Also, as described in notes 7, 8, 9, the Company is in
      default on payments under certain acquisition loans and other loan
      agreements.  To June 30, 2002, the creditor(s) have taken no action on
      these defaults.  These matters raise substantial doubt about the
      Company's ability to continue as a going concern.


                                       -8-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



1. Significant accounting policies (continued):

  (a) Basis of presentation (continued):

      Management plans to take the following steps that it believes will be
      sufficient to provide the Company with the ability to continue as a going
      concern:

      (i)   Raise additional capital through the sale of its capital stock;

      (ii)  Raise additional funds through financing agreements or renegotiate
            agreements currently in default;

      (iii) Acquire additional profitable operating companies through the
            issuance of shares of capital stock and cash.

      Such financing may not be available or may not be available on reasonable
      terms.  The resolution of this going concern issue is dependent on the
      realization of management's plans.  If management is unsuccessful in
      raising future debt or equity financings, the Company will be required to
      liquidate assets and curtail or possibly cease operations and creditors,
      including under the acquisition loans and other loans in default
      described in note 7, may be able to take action to realize on their
      security.

   (b)  Use of estimates:

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities
      and the disclosure of contingent assets and liabilities at the date of
      the financial statements and the reported amounts of revenues and
      expenses during the reporting period.  Significant areas requiring the
      use of estimates include the valuation of stock compensation and the
      determination of goodwill impairment.  Actual results may differ
      significantly from these estimates.

   (c)  Net income (loss) per share:

      Basic income (loss) per share is computed using the weighted average
      number of shares of common stock outstanding during the period.  Diluted
      income (loss) per share is computed using the weighted average number of
      common and potentially dilutive common stock issuances outstanding during
      the period.

                                       -9-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



1. Significant accounting policies (continued):

  (d) Recent accounting pronouncements:

      In August 2001, the FASB issued FAS No. 143, "Accounting for Asset
      Retirement Obligations", which requires entities to record the fair value
      of a liability for an asset retirement obligation in the period in which
      it is incurred and a corresponding increase in the carrying amount of the
      related long-lived asset.  FAS No. 143 is effective for fiscal years
      beginning after June 15, 2002.

      In October 2001, the FASB issued FAS No. 144, "Accounting for the
      Impairment or Disposal of Long-Lived Assets and for Long-Lived Assets to
      be Disposed of".  FAS No. 144 applies to the assessment of the impairment
      in the carrying value of long-lived assets, excluding goodwill and
      certain other specified items, including those to be disposed of by sale,
      including discontinued operations.  FAS No. 144 requires that those long-
      lived assets be measured at the lower of carrying amounts and fair value
      less costs to sell.  Therefore, discontinued operations will no longer be
      measured at net realizable value or include amounts for operating losses
      that have not yet occurred.  The Company implemented FAS No. 144 in
      fiscal 2002.  The adoption did not have a material impact on the
      Company's results of operations.

      Currently, the Company does not believe that the impact of the adoption
      of FAS No.'s 143 would be material to its historically reported financial
      results.

  (e) Comparative figures:

      Certain of the comparative figures have been reclassified to conform to
      the presentation adopted in the current period.

2. Inventories:

                                        December 31       June 30
                                               2001          2002
      ------------------------------------------------------------
                                                      (uanudited)


      Raw materials                       $ 299,000     $ 330,485
      ============================================================

   Inventories consist principally of drilling pipe and drilling supplies.



                                      -10-



GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001

<Table>

                                         <c>           <c>            <c>

3. Property and equipment:

                                                           Accumulated      Net book
   December 31, 2001                               Cost   depreciation         value
   ----------------------------------------------------------------------------------

   Drill rigs                                $3,029,952       $811,180    $2,218,772
   Automobiles and trucks                       416,695        176,120       240,575
   Equipment                                    617,034        129,074       487,960
   Computer equipment and software              348,702        295,899        52,803
   Office equipment, furniture and fixtures     288,993        270,495        18,498
   Office building                                1,735            549         1,186

   ----------------------------------------------------------------------------------
                                             $4,703,111     $1,683,317    $3,019,794
   ==================================================================================


                                                           Accumulated      Net book
   June 30, 2002 (unaudited)                       Cost   depreciation         value
   ----------------------------------------------------------------------------------
   Drill rigs                                $3,097,922       $913,878    $2,184,044
   Automobiles and trucks                       416,695        196,955       219,740
   Equipment                                    618,727        144,474       474,253
   Computer equipment and software              367,141        321,876        45,265
   Office equipment, furniture and fixtures     302,562        285,718        16,844
   Office building                                1,735            607         1,128

   ----------------------------------------------------------------------------------
                                             $4,804,782     $1,863,508    $2,941,274
   ==================================================================================
</Table>

   Depreciation expense recorded in the statements of operations for the six
   months and quarter ended June 30, 2002 was $158,264 and $78,770,
   respectively (six months and quarter ended June 30, 2001 was $101,279 and
   $47,781, respectively).

4. Investments:

  (a) Stothert invested $105,332 (2001 - $100,591) (CAD $160,000) in
      160,000 non-voting preferred shares of Lakes Ranch Ltd. on August 30,
      1996.  Lakes Ranch Ltd. is owned and controlled by a stockholder of the
      Company.  The recoverability of this investment became impaired and the
      Company determined that a write-off of the investment was required as at
      June 30, 2002.

  (b) In 2001, the Company paid cash of $19,367 and issued 25,000 shares
      of common stock with a market value of $16,250 to the stockholder of
      Trisil Minerals, Inc. ("Trisil") in exchange for a 180-day option to
      purchase Trisil.  In addition, the Company incurred capital costs of
      $1,220 related to this investment.  The Company wrote off $36,837 of
      costs associated with the option upon expiry of the original option in
      2001.

      During the first six months of 2002, the Company signed a new option
      agreement with the stockholder of Trisil Minerals, Inc.  Upon issuance
      of 25,000 shares of common stock of the Company to the stockholder of
      Trisil, the new agreement gives the Company an open period in which to
      evaluate Trisil's properties and markets for its products, at the
      Company's expense.  As at June 30, 2002, no shares have been issued
      for this right.


                                      -11-



GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



5. Goodwill:

   In 2000, the Company acquired AK Drilling, Inc., a company engaged
   in the contract drilling for minerals and water.  According to the terms of
   this acquisition, the Company acquired all of the capital stock of AK
   Drilling, Inc. for a total consideration of $1,150,000 in cash plus
   1,000,000 shares of common stock of the Company valued at $0.64 per share
   (market value at the acquisition date).  At June 30, 2002, $628,000 of the
   cash portion of the purchase price remained unpaid (see note 7).

   In 2000, the Company acquired Stothert Group, Inc., an engineering
   firm.  According to the terms of this acquisition, the Company acquired all
   of the capital stock of Stothert Group, Inc. for total consideration of
   $814,300 in cash plus 227,000 shares of common stock of the Company valued
   at $0.88 per share (market value at the acquisition date).  At June 30,
   2002, $546,300 of the cash portion of the purchase price remained unpaid
   (see note 7).

   Goodwill recorded through these acquisitions totaled $1,016,016.  The
   Company adopted FAS No. 142 "Goodwill and Other Intangible Assets" on
   December 31, 2001.  Goodwill will no longer be amortized commencing
   January 1, 2002 with the new accounting standard and the Company
   is required to perform annual assessment of impairment of goodwill.  In
   December 2001, the Company determined that a write-down of goodwill arising
   from the Stothert Group acquisition was required due to continued projected
   future negative operating cash flows from these operations.  The carrying
   value of Stothert Group's goodwill at December 31, 2001 was written down to
   nil, requiring a write-down of $657,095.  Amortization expense recorded in
   the statements of operations for the six months and quarter ended June 30,
   2002 totals $NIL and $NIL, respectively (six months and quarter ended June
   30, 2001 - $97,246 and $46,386, respectively).


                                      -12-


GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001


6. Bank indebtedness:

   Bank indebtedness is comprised of a chequing account overdraft and an
   operating line.  The First Citizens Bank Operating Line was established in
   2000 and is for a maximum amount of $100,050.  The First Citizens Bank
   Operating Line is secured by all unsecured inventory, accounts receivable
   and equipment.  The loan bears interest at a fixed annual rate of 9.25%.
   The balance due as of June 30, 2002 was $103,133 (2001 - $75,949).  The
   First Citizens Bank Chequing Account was in overdraft at June 20, 2002 to
   the amount of $20,062 (2001 - $NIL).


7. Payable on acquisition of subsidiaries:

                                      December 31        June 30
                                             2001           2002
   ---------------------------------------------------------------
                                                     (unaudited)

   AK Drilling, Inc.                   $  628,000     $  628,000
   Stothert Group, Inc.                   546,300        546,300

   ---------------------------------------------------------------
                                       $1,174,300     $1,174,300
   ===============================================================

   The Company is in default of making its purchase price payments on the
   acquisitions of AK Drilling, Inc. and Stothert Group, Inc. (note 5).  The
   Company intends to enter into negotiations with the debt holders to
   renegotiate the payment terms for the outstanding obligation under these
   acquisitions.  In the event that the Company is unable to renegotiate the
   payment terms of the individual acquisition agreements, the holders will be
   able to take action under their security rights on the debt instruments.
   The outcomes of the negotiations and any future actions by the debt holders
   are not known at this time.  However, the possibility exists that the
   actions taken or outcome of the negotiations may result in the acquired
   entities being returned to the holders in settlement and may possibly
   require the Company to cease operations.  The remaining operations of the
   Company are summarized as follows:


   Balance Sheet information
   as at June 30, 2002                               (unaudited)

   Current assets                                    $  149,952
   Other current liabilities                            749,239

   Statement of Operations information
   Six months ended June 30, 2002

   Interest income                                   $      146

   Operating expenses                                   789,651

   Expense recovery                                    (112,500)
   Other expenses                                       153,852
   --------------------------------------------------------------
   Total expense                                        831,003

   --------------------------------------------------------------
   Loss                                              $  830,857
   --------------------------------------------------------------




                                      -13-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



8. Long-term debt:

                                          December 31        June 30
                                                 2001           2002
   ------------------------------------------------------------------
                                                         (unaudited)

   FCB Consolidation (a)                   $  557,461     $  475,811
   Sellars Financial Inc. (b)                 275,968        350,424
   Center Capital 3 (c)                       237,558        215,404
   Maricopa Equity Management Corp. (d)       100,000        100,000
   FCB Trucks (e)                              29,996         23,029
   Dateline Drilling (f)                       26,808         27,521
   Kettle Drilling (g)                          2,750          2,750
   ------------------------------------------------------------------
   Total                                    1,230,541      1,194,939
   Less:  current portion                    (553,528)      (648,274)

   ------------------------------------------------------------------
   Long-term portion                       $  677,013     $  546,665
   ==================================================================

   Maturities of long-term debt are as follows:


       2003                            $  648,274
       2004                               337,552
       2005                               126,993
       2006                                52,961
       2007                                29,159

       -------------------------------------------
                                       $1,194,939
       ===========================================

   The Company's long-term debt agreements, as described below, do not contain
   any financial covenants.

  (a) The Company is obligated to First Citizens Bank under a 60-month
      promissory note dated September 30, 1999 in the principal amount of
      $944,030.  The note bears interest at a fixed annual rate
      of 8.25% per year with monthly payments of $19,253, and will be fully
      repaid as of August 2004.  The balance due as of June 30, 2002 was
      $475,811 (2001 - $557,461).  The loan is secured by certain inventory,
      accounts receivable, equipment and general intangibles.

  (b) On November 15, 2001, the Company issued a convertible note for
      $251,130 (CAD $400,000).  The Company received an additional $31,391 (CAD
      $50,000) on December 5, 2001, and an additional $94,174 (CAD $150,000) on
      December 12, 2001.  Interest payable on this note accrues at an annual
      rate of thirty percent and is payable monthly commencing 30 days
      following the advance of funds under the note.  The note matures on
      November 15, 2002.



                                      -14-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



8. Long-term debt (continued):

  (b) (continued):

      The holder has the right to convert up to fifty percent of any
      outstanding unpaid principal and interest at any time the Company's
      shares of common stock is trading at a price of $1.00 or greater for a
      period of ten consecutive trading days.  The conversion price per share
      shall be eighty percent of the average closing bid prices for the common
      stock for the five trading days prior to but not including the Conversion
      Date.  On maturity date, the holder has the right to convert any unpaid
      principal portion of this note of $50,000 or greater, or any lesser
      amount representing the full remaining outstanding and unpaid principal
      portion, and the monthly interest, into the Company's common stock at the
      conversion price.  The beneficial conversion option amount related to the
      convertible instrument is $124,642 and is recorded as a debt discount and
      additional paid in capital and recognized over the term to maturity of
      the loan as additional interest expense.

      The holder of the convertible note will receive one warrant to purchase
      one share of common stock for each dollar of principal or interest
      converted under this note.  The warrant shall be exercisable for a period
      of one year from the date of issue at the exercise price of eighty
      percent of the average closing bid prices for the common stock for the
      five trading days prior to but not including the exercise date.  The fair
      value of the warrants at the commitment date of $30,468 will be
      recognized upon conversion.

  (c) The Center Capital loan bears interest of 9.0% per year, and is
      payable in monthly installments totaling $61,680 per year.  The balance
      due as of June 30, 2002 was $215,404 (2001 - $237,558), and will be fully
      repaid as of September 2006.  This loan is secured by liens on certain
      drill rigs and other equipment.

  (d) On June 22, 2001, the Company issued a $100,000 convertible debenture
      together with a premium of $25,000.  The premium was paid on August 23,
      2001 as per the original terms of the convertible debenture agreement.
      On August 23, 2001 the parties agreed to an extension of the terms of
      the convertible debenture whereby the Company would pay an additional
      $15,000 to keep the funds available for a further thirty days until
      September 22, 2001, with an option to pay yet another $15,000 for
      another thirty days (until October 22, 2001).  Payments of $15,000 and
      $27,000 were made in September, 2001, and November, 2001, respectively.
      The amounts outstanding under the loan are overdue.  The Company
      has not made any additional payments to the lender and is in the
      process of renegotiating the terms and conditions with the lenders.
      At any time the holder may opt to convert the debenture to common
      stock at a conversion price which is the lesser of (a) 110% of the
      closing bid price for Company's common stock on the trading day
      immediately preceding its issuance date, or (b) 80% of the lowest
      closing bid price for Company's common stock during the five trading
      days prior to and including the conversion date. The conversion price
      is subject to certain adjustments should the Company grant stock options,
      declare a stock split, issue additional shares of capital stock or issue
      convertible debt. The beneficial conversion feature valued at $25,000
      has been recorded.



                                      -16-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



8. Long-term debt (continued):

  (d) (continued)
      as additional paid in capital and is recognized as additional interest
      expense during 2001 over the term of the debenture using the interest
      method.  Any remaining principal balance is to be automatically converted
      into common stock of the Company on June 22, 2003.

  (e) The Company is obligated to First Citizens Bank under a 60-month
      promissory note dated January 4, 1999 in the principal amount of $65,165.
      The note bears interest at a fixed rate of 7.75% per year with monthly
      payments of $1,314.  The balance due as of June 30, 2002 was $23,029
      (2001 - $29,996).  The loan is secured by liens on certain trucks.

  (f) The Company is obligated to Dateline Drilling, Inc. under a demand
      note in the principal amount of $25,000 plus accrued annual interest at
      prime plus 1%.  The note matured on January 26, 2002, and remains unpaid.
      The Company is in the process of renegotiating the terms and conditions
      with the lender.

  (g) The Company is obligated to Kettle Drilling under a 12-month
      promissory note dated December 2000, in the principal amount of $33,000.
      Payments of $2,750 per month commenced in January 2001, and no interest
      has been paid or accrued as of December 2000, in accordance with the
      terms of the promissory note.  The note is non-interest bearing unless
      payments are late, in which case interest due on the late payment amounts
      at 18% per year. The balance due as of June 30, 2002 was $2,750 (2001 -
      $2,750).  This note is guaranteed by a stockholder of the Company.

9. Obligations under capital leases:

   The Company is obligated to Dateline Drilling, Inc. ("Dateline") under a
   24-month lease arrangement dated May 20, 2000 to make monthly payments of
   $16,651 with a final payment of $38,000 at the end of the 24-month lease.
   At June 30, 2002, the Company is in default of its obligations under this
   lease.  As a result, Dateline has the right to repossess the leased driling
   equipment.  The Company is currently renegotiating with Dateline the terms
   of the agreement.  The balance due as of June 30, 2002 was $199,118
   (2001 - $184,956).  The implicit interest rate is 10.47%.

   The Company is obligated to Wells Fargo Equipment Finance, Inc. under a 48-
   month lease arrangement dated September 24, 2001 to make monthly payments of
   $1,779 with a final payment of $8,156 at the end of the 48-month lease.  The
   balance due as of June 30, 2002 was $49,920 (2001 - $77,510).  The implicit
   interest rate is 6.36%.

                                      -16-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



9. Obligations under capital leases (continued):

   At June 30, 2002 and December 31, 2001, the gross amount of property and
   equipment and related accumulated amortization recorded under capital leases
   and included in capital assets were as follows:

                                          December 31        June 30
                                                 2001           2002
   -------------------------------------------------------------------
                                                         (unaudited)

   Drill rigs                             $  395,000     $  395,000
   Automobile and trucks                      81,562         81,562
   -------------------------------------------------------------------
                                             476,562        476,562
   Less accumulated amortization             (45,248)       (62,492)

   -------------------------------------------------------------------
                                          $  431,314     $  414,070
   ===================================================================

   At June 30, 2002, capital lease repayments are due as follows:


       2003                                             $220,473
       2004                                               21,355
       2005                                               21,355
       2006                                               13,494
       ------------------------------------------------------------
       Total minimum lease payments                      276,677
       Less amount representing interest
        (at rates ranging from 6.36% to 10.47%)          (27,639)
       ------------------------------------------------------------
       Present value of capital lease obligations        249,038
       Less:  current portion                            216,572


       ------------------------------------------------------------
       Obligation under capital leases,
        excluding current portion                       $ 32,466
       ============================================================


   Interest of $5,246 (2001 - $6,678) relating to capital lease obligations has
   been included in interest expense for the six months ended June 30, 2002.

10. Advances from affiliated parties:

   Advances from affiliated parties are non-interest bearing, unsecured and due
   on demand. Advances of $469,535 (December 31, 2001 - $239,642) are owed to a
   stockholder of the Company.  Advances of $106,147 (December 31, 2001 -
   $106,897) are owed to a company controlled by a stockholder of the Company.
   In 2001, the Company issued 4,599,751 shares of common stock to a company
   controlled by a stockholder as settlement of $1,379,925 in advances from
   affiliated parties.

                                      -17-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001


11. AK International, S.A. operations:

   In 2000 and 2001, AK International, S.A. conducted contracted drilling
   activities in Peru, S.A.  Drilling ceased in 2001 when the Company's
   drilling contract was cancelled.  The Company removed its major assets and
   contract personnel from Peru, S.A. during fiscal 2001. The revenue from
   these operations during the first six months ending June 30, 2002 was $NIL
   (2001 - $291,919) with net income of $NIL (2001 - $20,513).  The remaining
   assets in Peru including inventory and property and equipment were not
   recoverable.  The Company recognized a write-down of property and equipment
   of $58,401 and a write-down of inventory in cost of sales of $35,405 during
   the last quarter of 2001.

12. Income taxes:

   Income tax expense differs from the expected expense if United States
   Federal rates were applied to earnings before tax.  The principal features
   causing these differences are shown below.

   Six months ended June 30 (unaudited)                 2001             2002
   ----------------------------------------------------------------------------

   Loss before taxes:
     United States                               $(2,593,017)     $(1,005,011)
     Foreign                                        (109,918)        (214,416)
   ----------------------------------------------------------------------------
                                                  (2,702,935)      (1,219,427)

     Non-deductible amortization of goodwill          97,246                -
     Tax loss carryforward                         2,605,689        1,219,427

   ---------------------------------------------------------------------------
   Total tax provision                           $         -      $         -
   ===========================================================================

   The Company has net operating losses aggregating approximately $3,908,000.
   $38,000 expire in 2019, $658,000 expire in 2020 and $3,212,000 expire in
   2021.  Certain of these tax losses are subject to the IRS restrictions on
   acquisitions of control and may not be immediately deductible.  Significant
   components of the Company's deferred tax assets and liabilities are as
   follows:

                                          December 31        June 30
                                                 2001           2002
   -------------------------------------------------------------------
                                                         (unaudited)

   Deferred tax asset (at effective
    income tax rate of 34%):
      Loss carryforwards                   $  937,720    $ 1,328,720
      Less valuation allowance               (937,720)    (1,328,720)

   -------------------------------------------------------------------
   Net deferred tax assets                 $        -    $        -
   ===================================================================


                                      -18-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



12. Income taxes (continued):

   Management believes it is not likely that it will create sufficient taxable
   income to realize its deferred tax asset.  As a result, the Company has
   provided a valuation allowance on the deferred tax asset.  Due to its
   losses, the Company has no income tax expense.

13. Capital stock:

   Under the Stock Plan maintained by the Company, the Company can grant
   incentive stock options and non-qualified stock options to officers, key
   employees, consultants and directors of the Company at a price not less than
   $0.25 per share.

   The maximum number of shares which may be issued under the plan is
   2,000,000.

   On January 14, 2000, the Company granted options to purchase 2,000,000
   shares of common stock.  500,000 shares are exercisable at $0.25 per share
   and 1,500,000 shares are exercisable at $0.50 per share.  The options vested
   immediately and expire in three years.

   Pursuant to APB 25, the Company has recorded employee compensation expense
   of $NIL during the six months ended June 30, 2002 (2001 - $16,250).

   No stock option activity occurred during the six month period ended June
   30, 2002:

                                                                     2002
   ------------------------------------------------------------------------

   Outstanding, January 1, 2002 and June 30, 2002               2,000,000
   ========================================================================

   Exercisable, June 30, 2002                                   2,000,000
   ========================================================================

   Weighted average remaining life of options outstanding       0.50 year
   ========================================================================


                                      -19-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



14. Income per share:

   Diluted loss per share has not been disclosed as the net effect of common
   shares issuable upon the exercise of options and upon conversion of
   convertible debentures would be anti-dilutive.  Common shares held in escrow
   of 5,000,000 for future debt conversion, if any, at June 30, 2002 have been
   excluded from the calculation of weighted average number of shares of common
   stock.

15. Financial instruments:

  (a) Fair value:

      The carrying value of cash and cash equivalents, accounts receivable,
      bank indebtedness, accounts payable and accrued liabilities approximates
      their fair value due to the short-term nature of the items.  The
      estimated fair value of long-term debt and obligations under capital
      leases approximates their carrying value as they bear interest at rates
      approximating current market rates.

      The estimated fair value of advances from affiliated parties is not
      practical to determine due to their related party nature and the absence
      of a secondary market for such instruments.

      In evaluating the fair value information, considerable judgment is
      required to interpret the market data used to develop the estimates.  The
      use of different market assumptions and/or different valuation techniques
      may have a material affect on the estimated fair value amounts for
      financial instruments.  Accordingly, the estimates of fair value
      presented herein may not be indicative of the amounts that could be
      realized in a current market exchange.

  (b) Foreign currency risk:

      The Company, through its subsidiaries, operates internationally which
      gives rise to a risk that earnings and cash flows may be negatively
      impacted by fluctuations in foreign exchange rates.  To the date of these
      financial statements, the Company has not entered into foreign currency
      hedging or other derivative arrangements.

                                      -20-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



15. Financial instrument (continued):

  (c) Concentrations of credit risk:

      Financial instruments that potentially subject the Company to significant
      concentrations of credit risk consist primarily of cash equivalents and
      trade accounts receivable.  To reduce credit risk, cash equivalents are
      only held at major financial institutions and management performs ongoing
      credit evaluations of its customers' financial condition.  The Company
      maintains reserves for potential credit losses.

16. Commitments and contingencies:

  (a) Operational leases:

      AK Drilling rents on-site office and living quarters on a per-job basis.
      The terms of the leases range from a month-to-month to a maximum of a six
      month lease.

      Stothert leases premises under an operating lease which expires in 2005.
      The aggregate minimum annual rental payments over the next five years are
      $170,455 (CAD $271,500) per year.

      Stothert leases office equipment and the payment schedule is as follows:

       ---------------------------------------------

       2002                              $  7,963
       2003                                 7,963
       2004                                 6,434
       2005                                 4,814
       2006                                 1,216
       ---------------------------------------------


      Rent expenses included in the statements of operations for the six months
      ended June 30, 2002 and 2001 was $96,368  (CAD $151,271) and $80,916 (CAD
      $124,206), respectively.

  (b) Letters of credit:

      Stothert has issued standby letters of credit totaling $133,160 (CAD
      $211,800) relating to contracts in progress.  These standby letters of
      credit will expire on December 31, 2002.

                                      -21-





GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



17. Geographic areas and industry segments:

   The Company defines an operating segment as a component that engages in
   business activities whose operating results are reviewed by the chief
   operating decision maker and for which discrete financial information is
   available.  The Company's chief operating decision maker has been identified
   as the Chairman, who reviews operating results for the entity as a whole in
   making decisions about allocating resources and assessing performance for
   the Company.

   The Company currently operates in two principal segments, engineering
   services and drilling services.

   The Company's foreign operations are conducted by Global, Stothert
   ("Engineering") and AK International ("Drilling").


                          For the three months          For the six months
                             ended June 30                 ended June 30
                              (unaudited)                   (unaudited)
                         -----------------------   ---------------------------
                              2001         2002           2001           2002
   ---------------------------------------------------------------------------

   Interest expense:
     Drilling             $ 18,927     $ 18,336    $    42,694    $    36,746
     Engineering             1,675            -          1,675              -
     Global                  8,052       48,760          8,052        121,412

   ---------------------------------------------------------------------------
                          $ 28,654     $ 67,096    $    52,421    $   158,158
   ===========================================================================

   Depreciation and
    amortization:
     Drilling             $ 40,000     $ 72,332    $    85,644    $   144,297
     Engineering             7,781        6,438         15,635         13,967
     Global                 46,386            -         97,246              -

   ---------------------------------------------------------------------------
                          $ 94,167     $ 78,770    $   198,525    $   158,264
   ===========================================================================

   Segment profit
    (loss):
     Drilling             $(34,302)    $ 31,336    $  (124,300)   $  (108,700)
     Engineering           (37,367)       3,816       (109,918)      (109,084)
     Global               (624,821)    (971,048)    (2,468,717)    (1,001,643)

   ---------------------------------------------------------------------------
                         $(696,490)   $(935,896)   $(2,702,935)   $(1,219,427)
   ===========================================================================

   Segment property
    and equipment
    additions:
     Drilling            $ 131,860     $ 17,080    $   131,860    $    63,229
     Engineering             4,314       13,473          3,137         16,515

   ---------------------------------------------------------------------------
                         $ 136,174     $ 30,553    $   134,997    $    79,744
   ===========================================================================



                                      -22-




GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



17. Geographic areas and industry segments (continued):


                                                As at             As at
                                    December 31, 2001     June 30, 2002
   ----------------------------------------------------------------------
                                                            (unaudited)

   Segment assets:
     Drilling                              $3,485,501        $3,564,555
     Engineering                              683,589           642,828
     Global                                   201,095            44,620

   ----------------------------------------------------------------------
                                           $4,370,185        $4,252,003
   ======================================================================


   Sales to the Company's major customers representing more than 10%
   of the total revenues included:

                        For the three months         For the six months
                           ended June 30                ended June 30
                            (unaudited)                  (unaudited)
                      -----------------------      ----------------------
                            2001         2002           2001         2002
   -----------------------------------------------------------------------

   Customer A           $302,078     $483,420       $639,774     $571,774
   Customer B            134,301            -        345,614            -
   Customer C              5,612      244,445          5,612      358,472
   Customer D            197,231       41,237        197,231      147,382
   =======================================================================

   The following geographic area data for trade revenues is based on product or
   service delivery location and property, plant, and equipment is based on
   physical location.

                        For the three months         For the six months
                           ended June 30                ended June 30
                            (unaudited)                  (unaudited)
                      -----------------------      ----------------------
                            2001         2002           2001         2002
   -----------------------------------------------------------------------

   Revenues from external customers:

      United States   $  659,455   $  582,096     $1,266,395   $  796,209
      Canada             719,684      569,238      1,327,375      976,340
      Peru               214,226            -        291,919            -
   -----------------------------------------------------------------------
                      $1,593,365   $1,151,334     $2,885,689   $1,772,549
   =======================================================================


                                                As at             As at
                                    December 31, 2001     June 30, 2002
   ----------------------------------------------------------------------
                                                            (unaudited)
   Segment assets:
      United States                        $3,485,501        $3,564,555
      Canada                                  884,684           687,448

   ----------------------------------------------------------------------
                                           $4,370,185        $4,252,003
   ======================================================================


                                      -23-



GLOBAL INDUSTRIAL SERVICES INC.
Notes to Consolidated Financial Statements
(Unaudited)
(Expressed in U.S. Dollars)

June 30, 2002 and 2001



18. Supplemental information:

                                                     For the six   For the six
                                                    months ended  months ended
                                                   June 30, 2001 June 30, 2002
 ------------------------------------------------------------------------------
                                                     (unaudited)   (unaudited)
 (a)  Cash flow information:
        Changes in operating assets
        and liabilities:
         Accounts receivable                           $(25,711)    $(345,604)
         Due from director                                    -       (14,012)
         Prepaid expenses                                22,308       (26,846)
         Inventories                                    (29,169)      (31,485)
         Accounts payable                               178,136        10,138
         Accrued liabilities                                  -        17,488
         Deferred revenue                               116,360       (33,793)

      -------------------------------------------------------------------------
                                                       $261,924     $(424,114)
      =========================================================================

 (b)  Supplementary cash flow disclosure:
        Cash paid for:
          Interest                                     $ 44,921      $132,979
          Income taxes                                        -             -

       Non-cash transactions:

          Shares issued as settlement of payables     2,252,500       185,954
          Shares issued for services                          -       579,270
          Shares issued for options to purchase          16,250             -

      =========================================================================


                                                                            Six
                                                      Year ended   months ended
                                               December 31, 2001  June 30, 2002
  -----------------------------------------------------------------------------
                                                                    (unaudited)
  (c) Allowance for doubtful accounts:
       Opening balance                                 $123,213       $140,306
       Bad debt expense                                  18,547          3,911
       Write-offs and settlements                        (1,454)       (12,568)

      -------------------------------------------------------------------------
       Closing balance                                 $140,306       $131,649
      =========================================================================


                                      -24-




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS

The following discussion should be read in conjunction with the consolidated
financial statements of the Company and related notes included elsewhere in this
Report for the period ended June 30, 2002. All statements contained herein
(other than historical facts) including, but not limited to, statements
regarding the Company's future development plans, the Company's ability to
generate cash from its operations, and any losses related thereto, are based
upon current expectations. These statements are forward looking in nature and
involve a number of risks and uncertainties. Actual results may differ
materially from the anticipated results, or other expectations, expressed in the
Company's forward looking statements. Generally, the words "anticipate,"
"believe,"  "estimate,"  "expects," and similar expressions as they relate to
the Company and/or its management, are intended to identify forward-looking
statements. Among the factors that could cause actual results to differ
materially could be the inability of the Company to obtain additional financing
to meet its capital requirements, needs and general business and economic
conditions as well as technological developments.

The accompanying consolidated financial statements include the accounts of
Global Industrial Services Inc. and its wholly-owned subsidiaries. Those
subsidiaries are Stothert Group, Inc. ("Stothert"), Stothert's subsidiaries, AK
Drilling, Inc. ("AK Drilling"), and AK Drilling's subsidiary.

OVERVIEW

The Company has a limited history of operations and no history of profitability.
It was incorporated as Charger Ventures Inc. on July 24, 1998 and changed its
name to Global Industrial Services Inc. on March 30, 2000. The Company was
organized to engage in any lawful corporate business, including but not limited
to the business of combining and integrating specialized product/service
providers of the industrial services industry sector. Prior to December 31,
1999, the Company had no operating history other than organizational matters. In
the second quarter of 2000, the Company acquired two operating entities and is
no longer in the development stage.

The auditors' report on the December 31, 2001 consolidated financial statements
includes an additional explanatory paragraph that states that the Company has
suffered recurring losses and negative cash flows from operations and has a
working capital deficiency and is in default on certain debt payments that raise
substantial doubt about our ability to continue as a going concern.  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

On April 6, 2000 the Company acquired AK Drilling, Inc. from its sole
shareholder who remains as the operator of AK Drilling. The acquisition price
was $1,150,000 in cash and 1 million common shares of the Company. The Company
is in default of making its purchase price payments on the acquisition of AK
Drilling, Inc. since August 6, 2000 as the Company did not have adequate cash
flow to pay out the remaining balance.  At June 30, 2002, the Company owed the
shareholder of AK $628,000 (December 31, 2001 - $628,000) of the cash portion of
the purchase. As a privately owned drilling company, AK Drilling has provided
drilling services to the mining industry since 1995.  Anthony King, the operator
of AK, has over 20 years of hard rock drilling experience.  Since 1995, AK
Drilling operates primarily in the mineral exploration and water drilling
industry. AK Drilling's offices are located in Ramsay, Montana and it has
projects throughout the United States.  AK Drilling's subsidiary, AK
International, S.A., had some minor operations in Peru; however, during 2001,
the Company ceased its Peru's operations due to bad economical factors and
unsteady political environment and focused its effort in the United States.  The
Company wrote off the Peru's assets in 2001.

On April 26, 2000 the Company acquired Stothert from its shareholders in
consideration for $814,300 in cash and 227,000 common shares of the Company. The
Company is in default of making its purchase price payments on the acquisition
of Stothert Group Inc. since November 20, 2000 as the Company did not have
adequate cash flow to pay out the remaining balance.  At June 30, 2002, the
Company owed the Stothert shareholders $546,300 (December 31, 2001 - $546,300)
of the cash portion of the purchase price. Stothert is a Vancouver based company
providing engineering, construction and project management services for the
power, pulp and paper, industrial minerals, forestry and environmental
industries.  It was established in 1966 and employs professional engineers,
managers and operations specialists.  Stothert provides a full range of services
including feasibility studies, detailed engineering, project management
services, turnkey supply and construction, operations and training services,
technical audits and due diligence.  It has carried out industrial projects in
over 60 countries.

During the first six months of fiscal 2002, the Company was financed through
advances from related parties of approximately $229,143 (six months ended June
30, 2001 - nil).  The Company issued 966,666 common shares during the six
months ended June 30, 2002 for cash proceeds of $130,000.  In addition, the
Company issued 3,488,363 shares for payments for services to contractors and
employees as well as settling for debts owed for $765,224 during the six months
ended June 30, 2002.

During the first six months of fiscal 2001, the Company issued shares for
payments for services to contractors and employees as well as settling for
debts owed for $2,268,750.  206,667 common shares were sold to raise $75,000
in cash in the first quarter of 2001.

                                      -25-
RESULTS OF OPERATIONS

The Company was not operating prior to December 31, 1999 and had only incurred
minimal start-up expenses as of that date. The acquisitions of Stothert and AK
Drilling were completed during the second quarter in 2000. The two acquired
companies results are reflected in the consolidated financial statements from
the dates of acquisition.

Total revenues during the quarter ending June 30, 2002 were $1,151,334 (2001 -
$1,593,365) made up of $582,096 (2001 - $873,681) from drilling services and
$569,238 (2001 - $719,684) from engineering services.  Both service lines'
revenues were down from the same period last year due to a slow recovery from
the downturn of the North American market earlier.  The Company is anticipating
a good year from its drilling services for the remainder of the year.  The
engineering services revenue will maintain at the current level for the
remainder of the year as the division implemented a four-day week in March and
thus will continue to have a lower billable percentage of staff time.

During the quarter ending June 30, 2002, cost of sales of $814,490 (2001 -
$988,096) were made up of $400,945 (2001 - $514,422) expenses in the drilling
services and $413,545 (2001 - $473,674) in the engineering services.  Compared
to the last period's, there had been a 18% decrease in its cost of sales.  Gross
profits for the second quarter in 2002 for the drilling and engineering
operations were 31% and 27% respectively (2001 - 41% and 34% respectively).
Both service lines' gross profits have decreased due to the competitiveness in
the slowly-recovering North American market.  The engineering service's gross
profit is also being affected by a decrease in the billable hours and increased
variable expenses.

During the three months ending June 30, 2002, general and administrative costs
amounted to $1,099,488 compared to last year's $1,240,073, a 11% decrease.  The
decrease is a continuous effort by the management to keep the general and
administrative costs at a reasonable level.  During the quarter, the Company
issued 3,788,363 shares at fair market value of $765,224 for compensation to the
contractors, to the employees and to settle debt payments.

Of the $1,099,488 in the general and administrative costs this quarter, $129,624
(2001 - $238,182) was related to salaries and benefits and another $545,139
(2001 - $332,622) to consulting fees.  The Company incurred interest expense of
$93,286 and received interest income of $331 in the quarter (2001 - $27,574 and
$12,274 respectively).

The Company recorded a loss of $935,896 during the quarter (2001 - a net loss of
$696,490). Drilling services resulted in a $31,336 profit in the second quarter
(2001 - $34,302 loss) and the engineering services operation resulted in a
$3,816 profit (2001 - $37,367 loss). The parent company recorded a loss of
$971,048 during the quarter (2001 - $624,821 loss).

The loss in the second quarter in 2002 is more than the same period in 2001
mainly because of the write-off of its investments of $105,332.

The results of the engineering and drilling operations are expected to improve
in 2002 as the Company has been negotiating additional drilling and engineering
projects and contracts in the third quarter of 2002. The negotiations are
ongoing.  The corporate entity will continue to be a cost center as it
undertakes to improve the debt and equity structure of the Company and review
additional acquisition opportunities.

LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2002, the Company had cash and cash equivalents of $38,170. The
working capital position of the Company at June 30, 2002 was a deficit of
$2,337,316.  This amount includes unpaid balances relating to the purchase of
Stothert and AK Drilling of $546,300 and $628,000, respectively.  The debt
owing to the shareholders of AK Drilling and Stothert are non-secured and
the debt owing to former shareholder of AK Drilling bears an interest rate
of 8% per annum.  The Company is in default of making its purchase price
payments on the acquisition of Stothert and AK Drilling since November 20,
2000 and August 6, 2000, respectively, as the Company did not have adequate
cash flow to pay out the remaining balance.  The Company intends to
re-structure these payments. It is expected that these unpaid balances will be
repaid from operating cash flows or from equity financings.  However, there
can be no assurance that additional equity can be raised or if raised, on
reasonable terms.  If the terms cannot be renegotiated with the shareholders
of Stothert and AK Drilling, the Company would require to pay the outstanding
amounts on demand.

As at June 30, 2002, $966,032 of the $1,443,977 long-term debt and obligations
under capital leases relates specifically to AK Drilling. These loans are
generally for and secured by equipment purchases for items such as drill rigs
and haul trucks and carry interest rates which range from 7.5% to 10%. The
Company is in default of its obligations under one of its lease agreements.
As a result, the lessor has the right to repossess the leased drilling
equipment.  The Company is currently renegotiating with the lessor the terms
of the agreement.

The related party loan is from a company related to the president of the
Company and it is non-interest bearing, unsecured and payable on demand.

At December 31, 2001 the Company had working capital of $257,662, before the
current portion $553,528 of the long-term debt, the current portion $201,869 of
the obligations under capital leases, the loan from a related party of $346,539,
and the debt owing to the shareholders of AK Drilling and Stothert which totaled
$1,174,300. Including these items in working capital, there was a working
capital deficiency of $2,018,574 at the end of the year.

                                      -26-

The long term debt interest is borne by AK Drilling, the related party debt
carries no interest, and the debt owing on the acquisitions are being
reorganized. Financing will have to be raised from other sources to repay the
debt to the related party and the debt owing on the acquisitions. The sources
that the Company is currently working on are Company cash flows and equity
offerings. Although there are no assurances that either of these will be
adequate to eliminate the Company's working capital deficiency, the Company
believes that such financings can be achieved.

The most significant assets of the Company are the drilling equipment operated
by AK Drilling with a net book value of $2,879,570 (December 31, 2001 -
$2,948,955), and the accounts receivable of $808,675 (December 31, 2001 -
$466,982) of which Stothert accounts for $466,304 (December 31, 2001 - $317,638)
and AK Drilling accounts for $239,641 (December 31, 2001 - $131,767), and other
amounts account for $102,730 (December 31, 2001 - $17,577).

Goodwill of $1,016,016 was recorded on the two acquisitions completed during
2000. The Company adopted FAS No. 142 "Goodwill and Other Intangible Assets" on
December 31, 2001.  Goodwill will no longer be amortized commencing January 1,
2002 with the new accounting standard and the Company is required to perform
annual assessment of impairment of goodwill.  In December 2001, the Company
determined that a write-down of goodwill arising from the Stothert Group
acquisition was required due to continued projected future negative operating
cash flows from these operations as a result of a slow economy and unfavorable
business and political factors.  The carrying value of Stothert Group's goodwill
at December 31, 2001 was written down to nil, requiring a write-down of
$657,095.  Amortization expense recorded in the statements of operations for the
quarter ended June 30, 2002 totals $NIL (2001 - $46,386).

OUTLOOK

The Company doesn not have sufficient cash on hand and does not expect to
generate sufficient cash from operations to maintain its present level of
development efforts over the next three months. However, the Company's
projections of future cash needs and cash flows may differ from actual results.
The Company plans to complete a private placement of equity securities to fund
possible future acquisitions and working capital. The sale of additional equity
securities or convertible debt could result in additional dilution to the
stockholders. The Company can give no assurance that it will be able to generate
adequate funds from operations, that funds will be available to the Company from
debt or equity financings, or that if available, the Company will be able to
obtain such funds on favorable terms and conditions. The Company currently has
no definitive arrangements with respect to additional financing.

Upon successful refinancing of the Company, the growth strategy will continue
with acquisitions in the industrial services industry. The Company plans to
continue its growth in its drilling and engineering operations, thus, acquiring
more related capital assets.  The Company plans to continue acquiring small to
mid-size companies in the drilling and engineering fields through a combination
of cash and stock.  Cash acquisition payments will be spread over 12 to 24
months and paid out of cash flow.  The desired ratio would be 35% cash and 65%
stock.  The Company believes that significant cost savings will occur through
the merger of similar companies through decreased overheads and a more
effective utilization of personnel and assets.

The Company is planning to raise up to $5 million in the next twelve months
to achieve the following objectives:

   * Pay $628,000 of the cash portion outstanding at June 30, 2002 for the
     acquisition of AK Drilling;

   * Pay $546,300 of the cash portion outstanding at June 30, 2002 for the
     acquisition of Stothert Group;

   * Finalize the terms of the joint venture between AK Drilling and Dateline
     Drilling;

   * Acquire four additional methane gas drilling units and support equipment;
     and

   * Acquire an Idaho-based drilling company with 17 drills in the U.S.
     mainland, Pacific Rim, Peru and Bolivia, increasing the Company's total
     number of drill rigs to 40.

If management is unsuccessful in obtaining financing, refinancing its
existing obligations under default, or in achieving profitable operations,
the Company will be required to cease operations.  The outcome of
these matters cannot be predicted at this time.


                                      -27-


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.

ITEM 2. CHANGES IN SECURITIES

On April 26, 2002, the Company issued an aggregate 1,477,000 shares of its
common stock to 9 individuals who were eligible participants in the Company's
Consulting and Legal Services Plan adopted by the Board of Directors on October
18, 2001 (the "Plan").  The Company limits the recipients of stock issued
pursuant to the Plan to natural persons who performed bona-fide services to the
Company which were not in connection with the offer or sale of securities in a
capital-raising transaction, and which do not directly or indirectly promote or
maintain a market for the Company's securities.  These shares were issued
pursuant to a Registration Statement on Form S-8, SEC File No. 333-87086.

On May 21, 2002, the Company issued 100,000 shares to St. George Capital
Corporation pursuant to the default provisions of a Promissory Note in the
principal amount of US$50,000 dated March 16, 2001 issued to Ingo Mueller,
President of St. George Capital Corporation.  Pursuant the terms of the
Promissory Note, holder shall be entitled to receive 100,000 shares of the
Company's restricted common stock for every thirty days in which the Promissory
Note remains unpaid after its maturity date of April 16, 2002.  The shares were
issued to satisfy the Company's obligation under the Promissory Note at April
16, 2002.  The shares were issued in reliance on the exemptions from
registration under Sections 3(b) and/or 4(2) of the Securities Act of 1933, as
amended (the "Act"), and the safe harbor from registration provided in
Regulation S.

On May 22, 2002, the Company issued 575,000 shares of its common stock to its
Managing Director, Reg Berry, in consideration of US$1,000 paid by him to the
Company on December 19, 2001.  The shares were issued in reliance upon the
provisions of Section 4(2) of the Act and are restricted against resale pursuant
to Rule 144.

On June 4, 2002, the Company issued an aggregate 600,000 shares of its common
stock to 2 individuals who were eligible participants in the Company's
Consulting and Legal Services Plan adopted by the Board of Directors on October
18, 2001 (the "Plan").  The Company limits the recipients of stock issued
pursuant to the Plan to natural persons who performed bona-fide services to the
Company which were not in connection with the offer or sale of securities in a
capital-raising transaction, and which do not directly or indirectly promote or
maintain a market for the Company's securities.  These shares were issued
pursuant to a Registration Statement on Form S-8, SEC File No. 333-89456.

On June 17, 2002, the Company sold 666,666 shares of its common stock to a non-
U.S. Resident at the offering price of US$0.15 per share.  The shares were
issued in reliance on the exemptions from registration under Sections 3(b)
and/or 4(2) of the Act, and the safe harbor from registration provided in
Regulation S.

On June 25, 2002, the Company issued 736,363 shares of its common stock to St.
George Capital Corporation in full settlement of invoices submitted to and owed
by the Company for management consulting services, administration, secretarial,
phone fax and office use for the six month period from January 1, 2002 to June
30, 2002.  The shares were valued at 70% of the closing bid price of the
Company's common stock on June 24, 2002, or US$0.11 per share.  The shares were
issued in reliance on the exemptions from registration under Sections 3(b)
and/or 4(2) of the Act, and the safe harbor from registration provided in
Regulation S.

On June 27, 2002, the Company sold 100,000 shares of its common stock to a non-
U.S. Resident at the aggregate offering price of US$10,000.  The shares were
issued in reliance on the exemptions from registration under Sections 3(b)
and/or 4(2) of the Act, and the safe harbor from registration provided in
Regulation S.

On June 27, 2002, the Company sold 200,000 shares of its common stock to a non-
U.S. Resident, at the aggregate offering price of US$20,000.  The shares were
issued in reliance on the exemptions from registration under Sections 3(b)
and/or 4(2) of the Act, and the safe harbor from registration provided in
Regulation S.

On July 19, 2002, the Company issued 200,000 shares of its common stock to one
individual who was an eligible participants in the Company's Consulting and
Legal Services Plan adopted by the Board of Directors on October 18, 2001 (the
"Plan").  The Company limits the recipients of stock issued pursuant to the Plan
to natural persons who performed bona-fide services to the Company which were
not in connection with the offer or sale of securities in a capital-raising
transaction, and which do not directly or indirectly promote or maintain a
market for the Company's securities.  These shares were issued pursuant to a
Registration Statement on Form S-8, SEC File No. 333-89456.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is in default of making its purchase price payments on the
acquisitions of AK Drilling, Inc. and Stothert Group, Inc., in the amounts of
$546,300 in default since November 20, 2000 and $628,000 in default since
August 6, 2000, respectively.  The Company intends to enter into negotiations
with the debt holders to renegotiate the payment terms for the outstanding
obligation under these acquisitions.  In the event that the Company is unable
to renegotiate the payment terms of the individual acquisition agreements,
the holders will be able to take action under their security rights on the
debt instruments.  The outcomes of the negotiations and any future actions by
the debt holders are not known at this time.  However, the possibility exists
that the actions taken or outcome of the negotiations may result in the
acquired entities being returned to the holders in settlement and may
possibly require the Company to cease operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company's stockholders during the
second quarter of 2002.

ITEM 5. OTHER INFORMATION

None


                                      -29-


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.


(a)  Exhibits.

   Number      Description

     2.1       Agreement and Plan of Reorganization between the
               Registrant and Passant Acquisition Corp. dated
               August 16, 2001 (incorporated by reference to
               Exhibit 10.1 to the Registrant's Current Report
               on 8-K filed with the Securities and Exchange
               Commission on August 21, 2000).

     3.1       Articles of Incorporation (incorporated by
               reference to Exhibit 3.1 to the Registrant's Form
               10-KSB filed with the Securities and Exchange
               Commission on April 17, 2001).

     3.2       Articles of Amendment to Articles of
               Incorporation (incorporated by reference to
               Exhibit 3.2 to the Registrant's Form 10-KSB filed
               with the Securities and Exchange Commission on
               April 17, 2001).

     3.3       By-laws of the Registrant (incorporated by
               reference to Exhibit 3.3 to the Registrant's Form
               10-KSB filed with the Securities and Exchange
               Commission on April 17, 2001).

     4.1       Form of Common Stock Certificate (incorporated by
               reference to Exhibit 4.1 to the Registrant's
               Registration Statement on Form SB-2 filed with
               the Securities and Exchange Commission on January
               11, 2002).

     10.1      Stock Option Plan (incorporated by reference to
               Exhibit 10.1 to the Registrant's Registration
               Statement on Form SB-2 filed with the Securities
               and Exchange Commission on January 11, 2002).

     10.2      Convertible Note issued to Sellars Financial Inc.
               (incorporated by reference to Exhibit 10.2 to the
               Registrant's Registration Statement on Form SB-2
               filed with the Securities and Exchange Commission
               on January 11, 2002).

     10.3      Option to Purchase Property Agreement Carl D.
               Huston and the Registrant (incorporated by
               reference to Exhibit 10.3 to the Registrant's
               Registration Statement on Form SB-2 filed with
               the Securities and Exchange Commission on January
               11, 2002).

     10.4      Share Purchase Agreement between AK Drilling,
               Inc. and the Registrant (incorporated by
               reference to Exhibit 10.4 to the Registrant's
               Registration Statement on Form SB-2 filed with
               the Securities and Exchange Commission on January
               11, 2002).

                         -30-

     10.5      Share Purchase Agreement between the Shareholders
               of Stothert Group, Inc. and the Registrant
               (incorporated by reference to Exhibit 10.5 to the
               Registrant's Registration Statement on Form SB-2
               filed with the Securities and Exchange Commission
               on January 11, 2002).

     10.6      Agreement and Licence granting Stothert the right
               to use the Skewed Gas Flow Technology (incorporated
               by reference to Exhibit 10.6 to the Registrant's
               Registration Statement on Form SB-2 filed with the
               Securities and Exchange Commission on January 11, 2002).

     10.7      Management Agreement with St. George Capital
               Corp. (incorporated by reference to Exhibit 10.7
               to the Registrant's Registration Statement on
               Form SB-2 filed with the Securities and Exchange
               Commission on January 11, 2002).



(b)  Reports on Form 8-K

      June 6, 2002   This Report was filed as an amendment to
                     the Registrant's Report filed on March 8,
                     2002 to include certain accounting disclosures
                     which were omitted from the initial Report with
                     respect to the engagement of KPMG LLP to serve
                     as the Registrant's new principal independent
                     accountants.




                                      -31-



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                GLOBAL INDUSTRIAL SERVICES, INC.



                                By: /s/
                                    Terry Kirby, President/Secretary/Treasurer
                                    (PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER)

                                Date: August 19, 2002





                                      -32-